Where are the facts to substantiate these claims? For example, given that Dodd-Frank has outlawed the Treasury from guaranteeing money market funds, why would another run fall on the taxpayers? Why wouldn’t the Fed simply support the entities that received funding from the money funds, and let the money funds wither away?

And what of the tortured analysis of the European bank intervention this summer? Originally, a “run” was supposed to be bad because funds would have to engage in a fire sale of their assets and depress prices. But the funds covered a 10% outflow this summer without selling anything or materially reducing their liquidity levels. Now they’re somehow responsible for European banks threatening to sell their assets. Were the funds suppose to reinvest money they no longer had into these banks? Were funds the only investors who responded to the headline risk that the Fed created and curtailed funding? And why isn’t it the responsibility of the banks and their regulators to manage such funding risks (to say nothing of the credit risks taken in their sovereign lending)?

Even if it were possible to categorically prove that money market funds pose no risks to taxpayers or the financial system, the Fed would still want to eliminate them because of the competitive threat they pose to banks and to their policy options. The policymakers are not disinterested parties in this debate.